Could a nonprofit religious television organization sell tangible personal property without collecting Florida sales tax when it also held regular public worship services?

Plain-English summary

The nonprofit religious broadcaster did not have to collect Florida sales tax on its sales of tangible personal property because it also qualified as a church.

The organization already held a valid consumer's certificate of exemption as a religious institution based on its nonprofit religious television station. It also conducted regularly scheduled worship and church services open to the public at its station facility. Taken together, those facts satisfied the rule's definition of a church—an established physical place where people regularly assemble for religious worship and instruction.

That distinction mattered because the ruling described churches as having an exemption for both qualifying purchases and their sales of tangible personal property, while other nonprofit religious institutions generally received only the purchase-side exemption.

The Department stated one limit: the organization still had to collect and remit tax on leases, licenses, or rentals of real property to others.

What this means for you

A religious-institution exemption certificate did not automatically exempt the organization's own sales. The Department separately analyzed whether the organization met the narrower church definition through regular public worship at an established physical location.

Common questions

Q: Were the organization's tangible-property sales exempt? A: Yes. The Department found that it qualified as a church on the stated facts.

Q: Did religious broadcasting alone establish the sales exemption? A: The ruling relied on both the existing religious-institution status and regularly scheduled public worship services at the station facility.

Q: Did the organization need to charge tax on real-property rentals? A: Yes. The ruling expressly preserved tax on its leases, licenses, and rentals of real property to others.

Q: Did holding a consumer's certificate of exemption alone settle the issue? A: No. The Department separately examined whether the organization was a church for purposes of its own sales.

Citations and references

• Fla. Stat. § 212.08(7)(o) — churches and religious institutions
• Fla. Admin. Code r. 12A-1.001(3) — exempt organizations and definition of church
• Fla. Stat. § 213.22 — Technical Assistance Advisements

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 95A-040R

Original ruling text

Status: Revises TAA 95A-40, issued August 10, 1995

Nov 13, 1995

Re: Technical Assistance Advisement 95(A)-040R (Revised) Sales by a Nonprofit Religious Institution Which Holds a Valid Consumer's Certificate of Exemption s. 212.08(7)(o), F.S. Rule 12A-1.001(3), F.A.C. Taxpayer: XXXXX FEI#: XXXXX Consumer's Certificate of Exemption#: XXXX

Dear :

This response is to your petition of April 12, 1995, requesting the Department's issuance of a Technical Assistance Advisement (TAA) pursuant to s. 213.22, F.S., and Ch. 12-11, F.A.C., regarding the referenced Taxpayer and matter. The Department has carefully examined your request and supporting documents and finds them to be in order. Therefore, the Department is hereby issuing the requested TAA.

DISCUSSION OF FACTS

Your letter and supporting documents impart the following information relevant to the issue under advisement herein:

"[Taxpayer] is a Florida corporation not-for-profit, exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code, and exempt from Florida sales and use taxes pursuant to its Consumer['s] Certificate of Exemption (see copy attached as Exhibit 2). The activities of [Taxpayer] include broadcasting of religious television programming, the conduct of regular worship services, benevolence activities, and other ancillary activities in keeping with its religious purpose. Based on the

information submitted with [Taxpayer's] most recent application for renewal of its Consumer['s] Certificate of Exemption, the Department of Revenue ('the Department') determined that [Taxpayer] is a religious institution as defined in the Florida sales tax statutes. [Taxpayer] submitted information with its application demonstrating that it qualified as a religious institution' in two distinct ways: (1) it meets the criteria set forth in Section 212.08(7)(o)2.a., F.S., regarding having aphysical place for worship' at which nonprofit religious services are carried on, and (2) it meets the criteria set forth in that same subsection regarding owning and operating a Florida television station, 90% of the programming of which is religious, and is predominately publicly supported. (See copy of Application materials submitted attached as Exhibit 3). The conduct of religious worship services is not, however, the sole or dominant use of [Taxpayer's] building facilities.

The Taxpayer's purposes as describe in Article II. of its Articles of Incorporation as originally submitted with its petition are the following:

"The general nature of the objects and purposes of this corporation shall be to provide an independent, incorporated group, not for profit, for the establishment and operation of a Christian broadcasting and telecasting system, founded upon and tested by Bible Principles to the end that through the Holy Spirit all people may be better prepared for living the abundant life of the Lord Jesus Christ."

The Taxpayer's petition was supplemented by a copy of an amendment (the "Amendment") to Article II. of its Articles of Incorporation dated September 28, 1995. The Amendment states the Taxpayer's purposes as follows:

"The general nature of the objects and purposes of this corporation shall be to provide an independent, incorporated group, not for profit, for the establishment and operation of a Christian ministry, founded upon and

tested by Bible Principles to the end that through the Holy Spirit all people may be better prepared for living the abundant life of the Lord Jesus Christ. This ministry will carry out its purposes by conducting regular worship/church services, providing prayer, counseling and financial assistance to needy individuals, engaging in telecasting and broadcasting activities, and any other lawful means."

A written statement regarding worship services included in support of your request provides the following:

"... meets every 2nd and 4th Thursday mornings from 10:00 A.M. - 12:00 P.M. Each meeting includes praise and worship music and special singing. We feature different speakers anointed to teach the Bible and minister to those who may have need...."

REQUESTED ADVISEMENT

You request the Department's ruling in the following issue:

"The issue in question is whether [Taxpayer] is required to collect from purchasers and remit to the Department sales taxes on sales of tangible personal property made by
[Taxpayer]. The determination of this issue hinges upon whether [Taxpayer] is considered a `church' for sales tax purposes."

DISCUSSION OF LAW

The following statutory, administrative, and case law is relevant to the issue under advisement herein:

Section 212.08(7)(o), F.S.: "(o) Religious, charitable, scientific, educational, and veterans' institutions and organizations. "1. There are exempt from the tax imposed by this part transactions involving: "a. Sales or leases directly to churches or sales or leases of tangible personal property by churches; "b. Sales or leases to nonprofit religious, nonprofit

charitable, nonprofit scientific, or nonprofit educational institutions when used in carrying on their customary nonprofit religious, nonprofit charitable, nonprofit scientific, or nonprofit educational activities, including church cemeteries;.... "2. The provisions of this section authorizing exemptions from tax shall be strictly defined, limited, and applied in each category as follows: "a. 'Religious institutions' means churches, synagogues, and established physical places for worship at which nonprofit religious services and activities are regularly conducted and carried on. The term religious institutions' includes nonprofit corporations the sole purpose of which is to provide free transportation services to church members, their families, and other church attendees. The termreligious institutions' also includes state, district, or other governing or administrative offices the function of which is to assist or regulate the customary activities of religious organizations or members. The term
`religious institutions' also includes any nonprofit corporation which is qualified as nonprofit pursuant to s. 501(c)(3), United States Internal Revenue Code, 1986, as amended, which owns and operates a Florida television station, at least 90 percent of the programming of which station consists of programs of a religious nature, and the financial support for which, exclusive of receipts for broadcasting from other nonprofit organizations, is predominantly from contributions from the general public." (Emphasis Supplied)

The Department in construing the above statutory exemptions for "churches" and "religious institutions" must adhere to, and be guided by, the long-standing and fundamental precept of statutory construction, established by the Florida Supreme Court, which mandates that exemptions from, or exceptions to, taxing statutes are special privileges granted by the legislature and must be strictly construed against the taxpayer and in favor of the administering agency. See Asphalt Pavers v. Dept. of Revenue, 584 So.2d 57 (Fla. 1 DCA 1991); Dade Cty. Taxing Auth. v. Cedars of Lebanon, 355 So.2d 1205 (Fla. 1978); Williams v. Jones, 326 So.2d 425 (Fla. 1975); Straughn v. Camp,

293 So.2d 689 (Fla. 1974); United States Gypsum Company v. Green, 110 So.2d 409 (Fla. 1959).

The Department is empowered to promulgate and adopt administrative law to interpret the provisions of the statutes it is charged by the Legislature to administer and enforce. The following rule provisions were promulgated and adopted by the Department to interpret the above statutory exemptions for churches and religious institutions:

Rule 12A-1.001(3), F.A.C., provides: "(3) RELIGIOUS, EDUCATIONAL, CHARITABLE, VETERANS' AND SCIENTIFIC ORGANIZATIONS, HOMES FOR THE AGED, NURSING HOMES OR HOSPICES, FEDERAL AND STATE CHARTERED CREDIT UNIONS, FLORIDA RETIRED EDUCATORS ASSOCIATION AND LOCAL CHAPTERS, ORGANIZATIONS PROVIDING SPECIAL EDUCATIONAL AND SOCIAL BENEFITS TO MINORS, STATE THEATER CONTRACT ORGANIZATIONS, MILITARY MUSEUM FUNDRAISERS, COAST GUARD AUXILIARIES, AND CEMETERY ASSOCIATIONS. "(a) A sale or lease directly to or sales or leases of tangible personal property by churches, or a sale or lease directly to nonprofit religious, nonprofit educational, nonprofit charitable institutions, and veterans' organizations, for use in the course of their customary nonprofit religious, nonprofit educational, nonprofit charitable activities, and for use by veterans' organizations, including church cemeteries, are exempt from the tax imposed by Part I, Chapter 212, F.S.... However, such institutions or organizations desiring to qualify for the exemption must obtain from the Department of Revenue a consumer's certificate of exemption, and payment must be made directly to the dealer by the exempt entity. See subparagraph (9)(d)2. of this rule for a suggested document to be provided the dealer by an employee who has been authorized to make purchases on behalf of a nonprofit organization when payments are made directly to the dealer by the exempt entity. This exemption shall not inure to any transaction otherwise taxable when payment is made by an exempt entity's employee by any means, including but not limited to, cash, check, or credit card, when that employee is subsequently reimbursed by the exempt entity. See Rules

12A-1.038 and 12A-1.039, F.A.C.
"(b) Sales or rentals of tangible personal property, rentals or leases of transient rental accommodations, rentals or leases of real property, rentals or leases of parking, docking, or tie down spaces, admissions, or other transactions subject to the tax imposed by Part I, Chapter 212, F.S., made by exempt entities, with the exception of sales or leases of tangible personal property by churches, are taxable. Such entities are required to register in the same manner as other dealers and collect and remit tax on transactions which are subject to the tax imposed by Part I, Chapter 212, F.S. For admission charges imposed by not-for-profit sponsoring organizations qualifying under the provisions of s. 501(c)(3) of the U.S. Internal Revenue Code, see Rule 12A-1.005(3)(g), F.A.C. "(c) Church' means a religious institution having an established physical place of worship where persons regularly assemble for worship and instruction for religious purposes. Religious organizations whose functions are radio or television broadcasting or those organizations conducting services for short periods of time at temporary locations, and religious associations that provide administrative functions only, are not considered to be churches. "(d)Religious institutions' means churches, synagogues, and established physical places for worship at which nonprofit religious services and activities are regularly conducted and carried on. The term `religious institutions' includes: "1. Nonprofit corporations, the sole purpose of which is to provide free transportation services to church members, their families, and other church attendees. "2. State, district, or other governing or administrative offices whose function is to assist or regulate the customary activities of religious organizations or members within the state or district organization. "3. Any corporation qualified as nonprofit pursuant to s. 501(c)(3), United States Internal Revenue Code, 1986, as amended, that owns and operates a Florida television station of which 90 percent of the station's programming consists of programs of a religious nature. In addition,

in excess of 50 percent of the financial support for the corporation, exclusive of receipts for broadcasting from other nonprofit organizations, must come from contributions from the general public."

Agencies are afforded wide discretion in the interpretation of statutes which they administer, and such interpretation will not be overturned on appeal unless clearly erroneous; reviewing court will defer to any interpretation within the range of possible interpretations by the administering agency. Dyer v. Department of Ins. and Treasurer, 585 So.2d 1009 (Fla. 1 DCA 1991); Natelson v. Department of Ins., 454 So.2d 31 (Fla. 1 DCA 1984), reh. den. Sept. 6, 1984.

Administrative rules interpreting sales and use tax statute are accorded considerable persuasive force and court would not depart from such constructions unless clearly erroneous or unauthorized. State Ex Rel. Szabo Food Serv., Inc. of N.C. v. Dickinson, 286 So.2d 529 (Fla. 1973), reh. den. Jan. 9, 1974.

The practical construction placed upon a statute by an administrative department of state government, when not in conflict with the constitution or the plain intent of the legislative act especially when established by long usage, is entitled to great persuasive force and efficacy, and the court will not depart from such construction except for the most cogent reasons. Green v. Hood, 120 So.2d 223 (Fla. 2 DCA 1960).

In the matter of Christian Television Corporation, Inc. v. Department of Revenue, State of Florida, Case No. 86-0456 (Jan. 5, 1987) the Department issued a final order ruling that the organization did qualify to have its Consumer's Certificate of Exemption renewed as a "religious institution". At that time, the statute did not contain the current provisions which specifically include Christian television stations which meet certain criteria within the definition of "religious institutions". XXXX (CTC), did have a Chapel as part of its facility at which regular religious services were held. The final order did not address the narrower issue of whether CTC was a church, since that issue was not at bar. Instead, the Department's ruling was limited in scope to recognizing that CTC

met the statutory definition of a religious institution for purposes of having its Consumer's Certificate of Exemption renewed. Further, the Final Order acknowledged that the legislature intended the following based on its choice of language in s. 212.08(7)(o), F.S., relating to the tax treatment of purchases and sales by "churches" and "religious institutions:

"It appears from these statutes that the Legislature intended to draw a distinction for sales tax exemption purposes between churches' andnonprofit religious institutions.' While the former enjoy a two-way exemption (on purchases and sales), the latter enjoys the exemption from taxation only on purchases...."

CONCLUSIONS OF LAW

Inasmuch as the Taxpayer already holds a valid Consumer's Certificate of Exemption as "religious institution" pursuant to s. 212.08(7)(o)2.a., F.S., based on its ownership and operation of a non-profit Florida television station engaged in religious broadcasting activities, this fact taken together with the Taxpayer's further activity of conducting regularly scheduled worship/church services open to the public at its station facility serves to satisfy the definition found in Rule 12A1.001(3)(c), F.A.C. Accordingly, sales of tangible personal property by the Taxpayer qualify as exempt from sales and use tax pursuant to s. 212.08(7)(o)1.a., F.S. Therefore, the Taxpayer bears no obligation to charge and collect sales tax on its sales of tangible personal property. However, please be alerted to the fact that the Taxpayer is and remains liable to collect and remit tax on any leases, licenses, or rental by it to others of real property.

This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes or judicial interpretations of the

statutes or rules upon which this advice is based may subject similar future transactions to a different treatment than expressed in this response.

You are further advised that this response and your request are public records under Chapter 119, F.S., which are subject to disclosure to the public under the conditions of s. 213.22, F.S. Your name, address, and any other details which might lead to identification of the taxpayer must be deleted by the Department before disclosure. In an effort to protect confidential information, we request you notify the undersigned in writing within 15 days of any deletions you wish made to the request or this response.

Sincerely,

Daniel M. Wagner, Jr.
Tax Law Specialist

Control No. 20983